I wouldn't put it in a 401k or traditional IRA. I would only use this strategy with a Roth. With the whole life insurance policy, I assume you are referring to some form of the Be Your Own Bank strategy. While I generally don't like that strategy, there may be situations where it works better with kids because you can lock in lower premiums. Not sure whole life is the way to go with that though. In any event, my preferred approach is to do with a Roth.
When you say income must be earned income…I understand that as the child must receive either a W2 or 1099 to contribute to their Roth. Is that correct?
![[TF2] The Russian Bear Trap](http://i.ytimg.com/vi/YFNSwz2_rOA/mqdefault.jpg)
Incredible that such high quality content gets posted for free. Thanks Shannon!
Ain't that the truth. Even if a lot of times she speaks above my head.
Thank you so much!
How would this benefit them when applying for college in the future?
Hi Sharon,
just came across your content, wow excellent information i have subscribed to your channel do you offer personal investment advice?
Do you think a better move would be to put the money into a whole life policy, instead of a 401K? Just a thought.
I wouldn't put it in a 401k or traditional IRA. I would only use this strategy with a Roth. With the whole life insurance policy, I assume you are referring to some form of the Be Your Own Bank strategy. While I generally don't like that strategy, there may be situations where it works better with kids because you can lock in lower premiums. Not sure whole life is the way to go with that though. In any event, my preferred approach is to do with a Roth.
@@sharonwinsmith Thanks 😊
When you say income must be earned income…I understand that as the child must receive either a W2 or 1099 to contribute to their Roth. Is that correct?
Generally yes - it can't be passive income like investment income from stocks, etc. or gifts from parents.
Hi Sharon. Do you have a kid and did you set this up for her/him? Just curious. (if you are like me, you have none...)
Yes - I do this for my son but he is too young to work for my business.